Drug plan to save seniors an average of $568

Details of Medicare benefit coverage still uncertain for Alaska

Posted: Thursday, August 25, 2005

Alaska seniors stand to save an average of $568 on prescription drugs

purchased through Medicare when a benefit becomes effective next year, according to a study released today.

The nationwide study by PricewaterhouseCoopers shows the amount of savings for seniors in each state as part of the Medicare Modernization Act passed by Congress in 2003.

Seniors can enroll in the prescription drug program in November for the following year. The deadline is May 15 and a penalty of a 1 percent increase on monthly premiums will be added for those who sign up late.

"The problem is that there is an awful lot we don't know about it yet," said Marie Darlin, a member of the Juneau chapter of the American Association of Retired Persons.

Medicare benefit

seniors who want the prescription drugs benefit should enroll in the federal program beginning in November, as it takes effect Jan. 1.

the deadline is may 15. A 1 percent increase will be added to the premium for every month after may.

for more information, visit www.hss.state.ak.us/dsds/medicare.htm.

The AARP supported the law because of the need to provide drugs for low-income seniors. But the plan is complicated with some costs and program details not yet decided for Alaska, and the benefits will be different for people with individual circumstances, Darlin said.

Medicare Today, a nonprofit organization with a mission to educate seniors about the benefit, released the study to let the elderly know the incentives for signing up for the program.

Medicare prior to 2003 did not offer a prescription drug plan. The legislation was touted as the biggest change to Medicare since its 1965 inception.

Since the law passed, an interim program has been in place, giving seniors a drug discount card. The interim program is set to expire at year's end.

According to the study, all Alaska seniors will save an average of $568 on prescription drugs and low-income seniors will save an average of $1,219. The plan may not be a better deal for those with coverage from current or former employers, Darlin said.

The federal government is subsidizing the costs; the benefit, including the interim plan, will cost the government $400 billion to $500 billion throughout its 10-year cycle.

Some 8,000 Alaska seniors earning $14,500 or less will benefit the most from the drug plan: Out-of-pocket costs will sink from $1,367 to $148. The study estimated 4,753 Alaska seniors with low incomes do not have prescription drug coverage.

The rest of Alaska's seniors receiving Medicare - about 24,800 people - will have out-of-pocket costs reduced from $1,280 to $712. For lower-income seniors, prescription drugs are more subsidized than those with higher incomes.

Out-of-pocket costs are the copay amounts paid after the subsidy is used.

Seniors joining a prescription drug plan will pay between $32 and $35 a month for the coverage and $250 a year for the deductible. Lower-income citizens will not have to pay some or all of those costs.

The new program will cover 75 percent of seniors' annual drug costs up to $2,200, and nearly all costs over $3,600. But a "doughnut hole" exists in the plan, which does not cover drug costs between those two amounts.

Alaska seniors using Medicaid for their prescription drugs must choose a new plan with Medicare before the end of the year.

Jon Sherwood, with the state Health and Social Services Department's office of program review, said the plans may not include every drug offered before in Medicaid, but will have the same drug classes and more drugs can be added to the plans by request.

"People need to look at a plan whose formulary meets their needs," Sherwood said.

• Andrew Petty can be reached at andrew.petty@juneauempire.com

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